Much of the confrontational efforts in the last four decades regarding the reduction of alcohol consumption have focused on the advertising of alcohol beverages. View Summary

Much of the confrontational efforts in the last four decades regarding the reduction of alcohol consumption have focused on the advertising of alcohol beverages. Critics of alcohol beverage advertising argue that the amount and substance of the alcohol advertising results in increased consumption of those beverages. A good deal of the research that supports this viewpoint utilises either cross-sectional data or controlled experiments, and identifies advertising as one of the possible factors influencing alcohol consumption. Using time-series analyses, this manuscript examines the relationship between distilled spirits advertising expenditures and consumption in the US from 1971 to 2008 on an aggregate and brand level. This four-decade period is especially interesting because it includes a decade in which the spirits industry ended a voluntary ban of advertising on electronic media.

Many observers believe advertising increases market size (with the implication that fewer people would smoke or drink alcohol or buy cars if there were no advertising for those products), and that it works by creating desires. View Summary

Many observers believe advertising increases market size (with the implication that fewer people would smoke or drink alcohol or buy cars if there were no advertising for those products), and that it works by creating desires. This paper examines the historical evidence and recent case histories of successful marketing campaigns from the UK’s IPA Effectiveness Awards. It turns out that very few advertisers have tried to increase the size of their market or claim to have done so. In the few cases that describe an increase in market size, we see consumers switching from one type of product to another, without increasing their total category consumption. No case claims to have created a new desire. The inference is that banning or restricting advertising may be an ineffective instrument of social policy.

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What’s changed? Does beer advertising affect consumption in the United States?

Beer consumption is predominantly male in the U.S. and has increased only slightly since the 1970’s. View Summary

Beer consumption is predominantly male in the U.S. and has increased only slightly since the 1970’s. Most studies have found only weak advertising effects on aggregate alcohol expenditures but recognise positive associations with selective demand across brands and product categories. A comprehensive econometric model assessing this period revealed small but positive relationships with radio and cable advertising and per capita consumption as well as, counter-intuitively, warning labels on products.

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Advertising's Role in Capitalist Markets: What Do We Know and Where Do We Go from Here?

Advertising is a rich, multidimensional phenomenon that has been studied in several disciplines. This research has led to an emerging body of findings and some potential generalizations. View Summary

Advertising is a rich, multidimensional phenomenon that has been studied in several disciplines. This research has led to an emerging body of findings and some potential generalizations. Even then, misconceptions about advertising persist, and important aspects of the phenomenon have not been adequately researched. Despite advertising's apparent weakness it is essential for free markets.

The human and economic cost of alcohol misuse in the UK is high. Alcohol advertising has been criticised because of its presumed impact on alcohol consumption. View Summary

The human and economic cost of alcohol misuse in the UK is high. Alcohol advertising has been criticised because of its presumed impact on alcohol consumption. This two-part investigation considers possible reasons for alcohol consumption in the UK. In the first section, the authors examine the hypotheses that advertising increases market size and that alcohol advertising drives overall consumption. In the second section, the authors identify and quantify the key correlates of alcohol consumption in the UK. They consider the claim that alcohol advertising is directed at driving consumption among younger drinkers by utilising the AlcoVision survey and building separate econometric models for young people aged 18-24 and those over 25. For both age groups, economic confidence and seasonality are identified as key correlates of consumption. Other correlates are dependent on age. Consumption among the 18-24 age group is correlated with on-trade promotions and the increasing trend for in-home drinking. Consumption among people over 25 is related to pricing issues, from both competing categories and the relative price of alcohol. No statistical relationship between alcohol advertising and consumption was found for either age group.

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The influence of advertising on the demand for chocolate confectionery

Chocolate confectionery in Western Europe is a mature, slowly declining market. This study looked for correlation between advertising and the year to year changes in market size of Belgium, France, Germany, the Netherlands and the UK. View Summary

Chocolate confectionery in Western Europe is a mature, slowly declining market. This study looked for correlation between advertising and the year to year changes in market size of Belgium, France, Germany, the Netherlands and the UK. No significant association demonstrated advertising driving changes in market size and there was negative correlation between market size and price and surprisingly low (90%) correlation with per capita income.

This paper is one of 18 selected by the Editorial Review Board of The Journal of Advertising Research to be a 'classic' - an article that has withstood the test of time. View Summary

This paper is one of 18 selected by the Editorial Review Board of The Journal of Advertising Research to be a 'classic' - an article that has withstood the test of time. First published in 1974, Ehrenberg examines the role of advertising by looking at advertising and consumption in general, then discussing competition among brands and the factors affecting brand choice, particularly for established brands of frequently bought goods. He concludes the advertising's main role is to reinforce feelings of satisfaction with brands already bought.

This paper argues that the shift away from mass-media advertising and its underlying message to consume, towards micro-marketing, has the potential to erode society's current motivation to consume.View Summary

This paper argues that the shift away from mass-media advertising and its underlying message to consume, towards micro-marketing, has the potential to erode society's current motivation to consume.

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The influence of advertising on the pattern of food consumption in the UK

This paper researches whether the food processing industry influences household diet through advertising, using an advertising-augmented Rotterdam model for eleven broad food groupings spanning 1969-1996. The econometric estimates reveal no evidence of advertising affecting demand for food at the expense of non-food demand and minimal evidence of advertising effecting the product composition of any given level of total food demand.

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Does advertising affect market size? Some evidence from the United Kingdom

Thoughtful review of a difficult question: 'does advertising affect market size?' Advertisers are usually concerned not with this but with their brand shares. View Summary

Thoughtful review of a difficult question: 'does advertising affect market size?' Advertisers are usually concerned not with this but with their brand shares. All the terms in the question have definition problems, which are discussed in detail: alternative definitions of `advertising', `market' and `size' vary with context and these variations bear upon possible answers. Since market definitions can be at different levels, depending on how consumers see markets, it is suggested that a better question would be: 'how far, if at all, does the advertising affect a size move up the hierarchy?' From this perspective, the authors consider what sort of answers may be expected and what they mean. Discussed: the `common-sense' view and its political connotations; interpretation of statistical evidence; what may or may not be learnt from empirical evidence, especially from the IPA `Advertising Works' series. In only 23 out of 133 IPA cases were market effects noted or implied: these are commented on. Also summarises result of 7 interviews by Vivian Braun with leading analysts in the field (1996), and publications which have addressed the question.

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Public policy, advertising and markets

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John Luik, International Journal of Advertising, 1996

The role of advertising with respect to consumption in a number of markets, notably food, drink and tobacco, is at the centre of a fierce world-wide policy debate. View Summary

The role of advertising with respect to consumption in a number of markets, notably food, drink and tobacco, is at the centre of a fierce world-wide policy debate. This paper looks at tobacco advertising, with a view to determining whether the elimination of tobacco advertising is a sensible and legitimate public policy option.

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Advertising, brands and markets

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Michael Waterson, International Journal of Advertising, 1996

Earlier ideas about how advertising works have been superseded by new views based on the considerable amount of empirical evidence now available. View Summary

Earlier ideas about how advertising works have been superseded by new views based on the considerable amount of empirical evidence now available. The evidence suggests that brand advertising expenditures, in aggregate, are most unlikely to have any impact on the size of mature consumer markets. Government policies which aim to reduce consumption of particular products by instituting advertising bans are therefore unlikely to have any impact. In certain cases they may be counter productive.

Econometric and laboratory research in the US, Canada and the UK have not revealed advertising to have a significant effect on alcohol consumption. View Summary

Econometric and laboratory research in the US, Canada and the UK have not revealed advertising to have a significant effect on alcohol consumption. The same is true of survey research, which confirms the powerful role of social factors such as the attitudes and behaviour of parents and peers. We present an econometric analysis of the alcoholic beverage markets of France, Germany, the Netherlands, Sweden (where alcohol advertising has been prohibited since 1979), as well as a new analysis of the UK market. The results provide further support for the view that advertising does not have a substantial effect on alcohol sales. The data also show that social forces other than prices and income were bringing about a strong reduction in demand for alcoholic beverages during the 1970s and 1980s, and that advertising did nothing to ward off this trend.

The positive role played by advertising in the market process has been largely ignored by academic economists. View Summary

The positive role played by advertising in the market process has been largely ignored by academic economists. It is only recently, since the modern economic revolution, that economists have realized the benefits of advertising and have joined the research agenda developed by researchers in marketing and other business fields. The present survey details the literature that examines the role played by advertising in lowering the 'full price' to consumers which allows consumers to maximize utility and allows the producers/retailers to maximize profits. The review begins with the seminal article by Stigler in 1960 which develops a (now famous) theory of the economics of information. Nelson's characteristics of goods and services are surveyed along with the extensions of other economists to the classification frameworks of Nelson and Porter. The survey follows the development of the theory of advertising in economics to the present day, and provides recent theoretical advances as well as empirical tests of these seminal theories.

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Advertising and alcoholic drink demand in the UK: some further Rotterdam model estimates

In this paper, Duffy presents estimates of the effect of advertising on alcoholic drink demand in the UK. View Summary

In this paper, Duffy presents estimates of the effect of advertising on alcoholic drink demand in the UK. Although the reported estimates of the advertising elasticities are very small, it might be thought that this could be a result of certain deficiencies in the two studies. For example, annual data are used by both authors and this may be the least suitable frequency at which to detect advertising effects. This paper reviews the effects upon re-estimates of the advertising elasticities of changes in various implicit assumptions underlying the study. In this sensitivity analysis it is found that the results obtained cast even greater doubts than ever held before upon the view that the marked expansion in alcoholic drink consumption since World War II owes anything at all to total drink advertising.

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Measuring the contribution of advertising to growth in demand: an econometric-accounting framework

This paper, first published in 1989, attempts to explain, with the aid of an estimated econometric model of alcoholic drink demand, why there have occurred over the past few decades marked differences in the growth rates of consumption of beer, spirits and wine in the United Kingdom. View Summary

This paper, first published in 1989, attempts to explain, with the aid of an estimated econometric model of alcoholic drink demand, why there have occurred over the past few decades marked differences in the growth rates of consumption of beer, spirits and wine in the United Kingdom. The main conclusion to emerge from this exercise is that, over the sample period, advertising's role in the expansion of total alcoholic drink demand, and its changing composition, has been barely measurable in an absolute sense and certainly quite unimportant in comparison with the effect of income, especially, and to a smaller extent relative prices. That is to say, the calculations suggest that the great expansion in consumption of alcoholic drinks over the sample period, particularly of spirits and wine, owes little, if anything at all, to advertising of these products.

Johnson (1985) presents a system-wide analysis on the effects of advertising on the demand for beer, wine and spirits in the UK. View Summary

Johnson (1985) presents a system-wide analysis on the effects of advertising on the demand for beer, wine and spirits in the UK. However, his results are not consistent with other studies in the area. This paper, first published in 1989, shows that his results can be improved by using a different demand equation for the alcoholic beverages group. Furthermore, this paper also considers the analysis of treating advertising as a stock rather than a flow. This analysis reveals that advertising of beer, wine and spirits depreciates in consumers' minds fully within a year.

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Keeping Advertising from Going Down in History - Unfairly

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Richard W Pollay, History of Advertising Trust, Vol 11, No 2 1988

History is inevitably only what historians write. Whether complete and valid or not, tomorrow's history of today will express the perceptions of the sequence of historians who reflect on today's events from ever increasing distance. View Summary

History is inevitably only what historians write. Whether complete and valid or not, tomorrow's history of today will express the perceptions of the sequence of historians who reflect on today's events from ever increasing distance. This exposes all history to growing biases, but the potential distortions seem particularly severe when advertising's role in society is assessed. Historians and allied social sciences, save economics, now judge advertising severely. Without research to keep this criticism realistic, history will likely be very harsh in its assessment of advertising's social costs and benefits. To reach the economic goal of selling goods, advertising operates psychologically, communicating to change attitudes, images, cognitions, feelings, preferences or values. This leads many to judge that in the aggregate, across products, across people and across time, advertising has not only psychological but sociological and cultural effects also. These macromarketing effects are less obvious and even more difficult to research than the short-term economic or psychological consequences of advertising, purchasing and perceptions. Nonetheless, they are held to be of even more import.

This paper, published in 1982, is a preliminary report of research that was carried out into the influence of advertising in five major areas of consumer expenditure. View Summary

This paper, published in 1982, is a preliminary report of research that was carried out into the influence of advertising in five major areas of consumer expenditure. In each case it tests the proposition that changes in advertising cause changes in consumption, employing Box-Jenkins' techniques to determine the existence of causality using quarterly data during the period 1963 to 1978. No market showed advertising to have any effect upon its size.

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Dispelling the myth: the effects of total advertising expenditure on aggregate consumption

This paper, originally published in 1982, investigates attempts to test the proposition that advertising is an important factor influencing total consumption. View Summary

This paper, originally published in 1982, investigates attempts to test the proposition that advertising is an important factor influencing total consumption. It surveys prior work in the area and discusses a more useful definition of the expression 'changes in advertising cause changes in consumption' than has been implied in most past tests of the relationship. The criteria for testing causality involve comparing the forecasting ability of a univariate consumption model with a bivariate model of consumption and advertising. These models are built using the powerful Box-Jenkins' techniques of time series analysis. A study of the relationship in the United Kingdom is reported covering the period 1969 to 1980. The results do not support the hypothesis that total advertising expenditures alter aggregate consumer behaviour.